8111 - The Unique Identification ( UID) Number: A History - dravirmani blogpost

The Unique Identification ( UID) Number: A History

BACKGROUND

India was one of the first countries in the World  to launch a direct attack on Poverty, long before the UN came up with Millennium development goals.  Prime Minister Indira Gandhi launched the “Garibi Hatao” (Remove poverty) program in the mid-sixties. Yet decades later the record remained mixed, while the programs and financial expenditures on “Anti-poverty” or “Poverty Alleviation” programs expanded by leaps and bounds.  Many scholars judged the performance of India very poor in global comparisons.  There seemed to be a disconnect between the intentions and financial allocations and expenditures.

FOOD DEBIT CARD

Virmani and Rajeev (2002)[i] while analyzing the Public Distribution System (PDS) came up with a suggestion for increasing the effectiveness of the PDS.  They suggested a (Food) Debit card or Smart Card System as part of a three pronged approach for eliminating leakages and ensuring that every entitled person received her due (type I and type II errors).  The difference between the proposed debit card and the smart card was that the former required connectivity for determining that purchase of subsidized food remained within the entitled food allocation, while the smart card could be charged with food credits periodically (every quarter or every year) and could be debited directly at a counter without referring to a central authorizing data base.  The second prong was a food stamp system in rural areas in which it may take time to cover every one with smart cards and all PDS shops with smart card readers.  This was based on the success of the  Andhra food stamp experiment.  The third prong was to cover remote and hilly areas that even the PDS had not reached and where food markets may be monopolized or non-existent, through food banks.

SMART CARD: ID AND MULTI-APPLICATION

Virmani (2005)[ii] argued for the setting up of an “Indian version of an income transfer system using a modern smart card technology that delivers cash and/or subsidies to the poor based on their entitlements as per specified parameters and norms.”  With the multiple subsidies and interventions and “all the current stakeholders, special interest groups and social policies could be accommodated within a single integrated system.”  Virmani (2006)[iii] elaborated that, “The smart card would also constitute a national identity card.  For instance the card could contain information on citizenship and voting eligibility (constituency for voting) as provided and checked by the home ministry and the election commission respectively.  Secrecy and confidentiality clauses would have to be built into the national smart card system by law.  For instance, any person who does not want to avail of any subsidies / entitlements from the government need not provide the information needed for calculating & monitoring the subsidy/entitlement.  They would for instance only provide the information necessary to obtain a passport and voter registration card.  Many agencies of government (e.g. CBEC, CBDT, and Home) have proposed identification cards.  There are significant economies of scale in having one smart card system for all citizens, with different agencies having their own special modules (password protected access to memory segments) within the card for their specialised needs.”

EMPOWERMENT: UNIQUE ID NUMBER

        As part of the preparations for the Eleventh Plan, on March 8^th 2006 a Working Group on “Integrated Smart Card System” for the Eleventh Plan was set up under the Chairmanship of the Principle Advisor for Development Policy, Dr. Arvind Virmani. 

 This Group submitted its report titled, “Entitlement Reform for Empowering the Poor: The integrated Smart Card System” in November 2006. One of the important recommendations of this report, was that the foundation of this system would be the Unique Identification Number (UID): “The concept of a unique national level citizens’ identity number developed from these initiatives as well as aspirations for a Pan-India e-governance system.  This unique ID could form the fulcrum around which all other smart card applications and e-governance initiatives would revolve. This could also form the basis of a public-private-partnership wherein unique ID based data can be outsourced to other users, who would, in turn, build up their smart card based applications.”  “Once it is linked to a national level unique ID, …. makes identification of beneficiaries an easy task, avoiding duplication and reducing all the attendant costs. Multiple applications piggy-backing on the unique ID, both in the government and private activities, can be conceived..”.

The committee had the following to say about the implementation of the UID system:

“The ISCS should be based on the national level unique ID being      launched by the Ministry of Home Affairs, using a unique national ID as the identifier necessary to avoid duplication of benefits and the beneficiaries thereby helping correct targeting and avoiding Type I and Type II errors.”

“A single authority would however be needed to co-ordinate the program, and to standardize and maintain the integrity of the overall system.  In the start up phase the planning commission can play the role of integrator and coordinator.  Once operations are under way, the National Statistical Commission is the best placed to act as co-ordinator and overall owner of the program.  As already indicated, the responsibility for maintainance and updating of the individual modules and sub-module of the ISC system would remain with the individual departments/ministries.”

“A consultant could be hired to work out the operational details of the program for introduction of the ICS system.  A committee of concerned ministries (PC, Nat Stat com, Finance, Food, RD) could be set up to firm up budgetary allocations, draw up implementation plans and oversee the introduction of the system.”

IMPLEMENTATION OF UID

Process Committee

          Pursuant to this recommendation, a Process Committee was set up on 3^rd July 2006, through an order of the Department of Information Technology (E governance Division), to suggest “the processes. for updation. modification addition & deletion of data and fields from the core data base to be created under the Unique ID for BPL families Project,” under the Chairmanship of Dr. Arvind Virmani, Principle Advisor, Planning Commission.  This committee worked out the details of the UID number system and the nature and broad structure of the UID authority that could be set up to manage the system.  It appointed a consultant to operationalize the system. The consultant prepared a detailed “Project Report for setting up the UID Authority,”  It also examined various existing data basis of different agencies and concluded that the only usable data base and the only one immediately usable for this purpose, was the voter registration digital data base of the Election Commission.  The consultant then carried out a pilot project in one urban and one rural area to test how easily and quickly, UID numbers could be issued to all adults in the pilot project area, based on the Election Commission’s data base of registered voters.  The pilot project concluded that about 80% coverage could be attained in a fairly short time, based solely on the Election Commission’s electronic records.  Based on the inputs received, the Process Committee recommended the setting up of a UID authority to carry out the process of issuing Unique ID, along with specific recommendations on these issues (August 2006).

Essential Features

   One of the important mandates of the process committee was to design a practical structure that would have the acceptance of all interest groups represented by the various departments of the government.  Further the design was also motivated by the necessity of ensuring that the UID have the widest possible public support.  It was therefore carefully designed to be as simple and non-controversial as possible while fulfilling the basic objective of "Unique Identification (UId)." This required that only the barest minimum of information essential for ensuring uniqueness would be collected on a compulsory basis from all residents, so as to minimize public concerns about privacy. We determined that this included the place and date of birth, the name of the natural mother and father and signature and/or thumbprint of the UID holder. Though it was accepted that an additional technological identifier like eye scan may be needed to weed out duplicate IDs, 80% of the adult population could be effectively and efficiently covered within two years on the basis of the digital data base of the Election Commission (which has a legal standing).  This was based on an experiment covering both urban and rural areas, carried out for us by a consultant engaged by the Committee.  

    The controversial issue of citizenship was also separated from the ID, by saying that an empty digit could be provided in the UID number format in which a 1 could be entered if the holder of the UID was a citizen and zero if she was not. In principle this allowed, other variation such as a '2' for a non-resident Indian (NRI) with an Indian passport and a '3' for an Overseas Citizen of India (OCI) with a foreign passport.

   The issue of linking social welfare benefits to UID was addressed through the proposal for a application smart card which could have different modules related to different benefits (e.g. food, education, health) and populated by different departments (e.g. PDS, State education department, primary-secondary health centers).  It was envisaged that this information would continue to be based on/related to the information currently on the records of the concerned departments, submitted on voluntary basis by those desiring to receive these benefits. The information entered on each module would also be controlled and managed separately by each concerned department, minimizing the probability of misuse of a comprehensive data base.

     Similarly we envisioned private use of the UID as follows: The UID authority would set up a commercial window, which it would receive and process requests for authentication ( that the UID number matched the basic individual details), for a fee.  The basic UID data base would remain under the complete control and security of the UID, which would ensure its integrity and confidentiality. 

 Cabinet Approval

The Department of Information Technology thereafter submitted a proposal for the setting up of the UID authority. An Empowered Group of Ministers ( EOGM) was set up in December 2006, to resolve the issue of the overlap of the National Population Register, under the Registrar General, Home Ministry and the UID under a New UID authority overseen by the Planning Commission.  The EOGM finally resolved the issue in November 2008.   In the end the original recommendations of the Working Group on MASC largely prevailed and the UID Authority was constituted and notified by the Planning Commission in January 2009.  Shri Nandan Nilikani was selected as the first Chairman of the UID authority, and took charge in July 2009. 

AADHAR

      The ‘Unique ID’ was subsequently christened as ‘Aadhar’by the UID led by Shri Nandan Nilinkani. It evolved into a comprehensive technology driven identity platform that became conceptually and practically much more closely linked to social welfare transfers and subsidies, including to Cash transfers and benefits through bank accounts.  

   This extension of the basic UID beyond that proposed by the UID working group and the Process Committee has created new issues.  One is the broadening of the range of information compulsorily required from all citizens/residents leading concerns about privacy and misuse of such information.  These concerns have been accentuated by the fact that the task of giving UID numbers has been sub-contracted to private agents, who it is feared may keep copies of this information for private use. If the recommended UID arrangement had been followed, the additional information would only need to be supplied to the department for which it is relevant and who would have the responsibility for keeping it confidential:  It would not have been accessible in integrated form by anyone (thus minimizing privacy concerns).

[i] Virmani, Arvind and  P. V. Rajeev, “Excess Food Stocks, PDS and Procurement Policy,” Planning Commission Working Paper No. 5/2002PC, December 2001.

http://www.planningcommission.nic.in/reports/wrkpapers/wp_pds.pdf.

[ii] Virmani, Arvind, “Policy Regimes, Growth and Poverty in India: Lessons of Government Failure and Entrepreneurial Success!”, Working Paper No. 170, ICRIER, October 2005. http://www.icrier.org/page.asp?MenuID=24&SubCatId=175&SubSubCatId=233 .

[iii] “Virmani, Arvind, “Poverty And Hunger In India: What is needed To Eliminate Them,” Working Paper No. 1/2006-PC, Planning Commission, February 2006. http://planningcommission.nic.in/reports/wrkpapers/rpwpf.htm.

Posted by Arvind Virmani at 6:57 AM

Labels: Education Credit card, Food debit card, india, Multi Application Smart Card, PDS, Poverty, Social Welfare

5195 - Whither Aadhaar after 4 years and Rs 3,500 crore? - Governance Now

Whither Aadhaar after 4 years and Rs 3,500 crore?

...especially now when it is delinked from LPG subsidy? Has anybody benefited at all from one more layer of hassle?

PRATAP VIKRAM SINGH | FEBRUARY 13 2014

Even as citizens feel the unique identification number or the Aadhaar programme has added just another layer to the existing identification process and criteria for accessing services, a leading economist, who earlier headed the planning commission’s working group which proposed UID, has said that the ambitious programme is a diversion from the recommendations of the expert group.

According to Dr Arvind Virmani, “The UID as envisaged by the commission’s working group and given concrete shape by the ‘process committee’ was to ensure that every potential or actual recipient of government welfare programs had a UID.” The commission then was deliberating on assigning unique ID numbers to the BPL population.

Though UIDAI made biometric compulsory for issuing a UID number, Dr Virmani, in an email interaction with Governance Now, said, “We did not recommend that. We thought it may be needed to eliminate issue of duplicate IDs to some people. We had recommended that only the minimum information needed for issuing unique ID (UID) be collected, even as biometric was not ruled out.” Several civil society oganisations and civil rights groups have questioned the government’s move to go ahead with its biometric collection programme without taking consent of parliament. The collection of biometrics of residents always runs the risk of profiling and tracking.

Dr Virmani added that the objective was not only to reduce leakage but also to ensure that any poor person who was not receiving any benefit got it. Any connection to payment of benefits was expected only after the “missing” poor and hungry were identified.

The government set up the UIDAI in 2009 as a body attached to the planning commission to issue 12 digit unique identification number to all residents after capturing their demographic and biometric details. The authority aims to offer a digital authentication platform to authenticate, anytime, anywhere.
Unfortunately, after four years and an expense of `3,500 crore, the Aadhaar card is just another identification document, which now has to be bundled with other supporting documents while applying for a bank account, ration card and scholarship, among others. It’s another layer of identification and criteria for accessing services.

This is what Seema, who lives in one the narrow lanes of Raghubir Nagar, a resettlement colony near the upscale Rajouri Garden in west Delhi, told this correspondent. “Previously the authorities asked for the ration card, voter ID and electricity bill as supporting documents. Now they also ask for Aadhaar as the fourth document,” she said. She had to submit these documents to the respective authorities while applying for scholarship (on behalf of her children) and ration card. That has also been the experience of several people in the Raghubir Nagar and Seelampur.

Rajesh Pandit, 37, a Raghubir Nagar resident, narrated his story while he went to a State bank branch to open a bank account with the help of Aadhaar in November. “When I went to open an account with the branch, the bank manager asked for a proof of identity and residence. I gave my Aadhaar, but he said I should also have a PAN, or electricity bill or a ration card.” Harassed, he approached a tout, gave him `250 and got a PAN card. He wonders whether banks will still refuse to open an account.

“It was a mistake to connect UID to bank accounts right from the start,” said Dr Virmani. In Delhi the relative coverage of banking is still on a higher side. Given the large section of population without bank accounts, this multiplied the difficulty of reaching those poor and hungry who do not receive any benefit, he said.

Aadhaar is in principle a good idea, but it has to be a one-stop-shop for residents, says professor Dipankar Gupta, a leading sociologist, adding, “What’s the point of spending so much on the programme if people still have to provide a number of documents to service providers?”

While the authority is close to generating 60 crore Aadhaar numbers by March as per its initial mandate, doubts and dilemma relating to the clear purpose, role in service delivery, outcome, mandatory or optional nature, privacy and data security aspects remain.

Eyeing political dividends, the government linked Aadhaar with direct benefits transfer (DBT) in late 2012, and finance minister P Chidambaram famously called it a game-changer. But the strategy backfired. On January 30, the cabinet committee on political affairs decided to put on hold the direct benefits transfer of subsidy for liquefied petroleum gas (DBT-L).

The programme created hassles for consumers, as many of them didn’t receive subsidy payments after buying the LPG cylinders on market prices. While it may not hurt the higher and middle income group, shelling `1,200 (in Delhi) for a cylinder created a hole in lower-income group consumers’ pockets. The cabinet’s decision was a major setback for the UIDAI, as the DBT-L was the only programme wherein government had made Aadhaar mandatory for availing the subsidy.

Under the DBT-L, consumers pay the market price—which varies from `1,000 to `1,300 depending on the import price and the tax structure followed by respective states. After Aadhaar is linked to the bank and LGP database, the government transfers `435 as in imprest amount when a consumer books a cylinder. This amount, however, is taken back by dealers when consumers discontinue the LPG connection. The government provides the actual subsidy, which could be between `450 to `800, only after information related to delivery of the cylinder is fed into the system by the dealer.

Though consumers earlier paid between `400 and `450 for buying a subsidised LPG cylinder, they now end up paying `600 (this could go to `800 depending on the international market) from their own pocket. Moreover, if the payments are delayed, it puts pressure on consumers’ pocket.
Take the example of E Raja Goud, who works as an analyst with a commodities market research firm in Hyderabad. The Andhra Pradesh capital belongs to the initial group of 20 districts where the DBT-L was launched in June and the cooking gas cylinders were sold on market price from September. Goud told this correspondent over phone that though he had bought two LPG cylinders in November and January, he hadn’t received a single penny yet. The 27-year-old had to pay `1,050 both times.

“When I ask my (LPG) dealer, he says it will take at least couple of months,” Goud said. He said that even his landlord and some of his office colleagues haven’t received the subsidy payment. Previously, consumers approached only the dealer. Now they have to deal with three bureaucracies—the LPG dealer, the bank and the UIDAI.

As for putting DBT-L on hold, an official formerly with the UIDAI blamed the government itself. “If the government wants the programme to succeed, it will succeed. If it wants the programme to fail, it is bound to fail,” said the officer, speaking on condition of anonymity.

By mid-January, the DBT-L was rolled out in 291 districts. Subsidy to the tune of `2,800 crore was transferred to 1.9 crore consumers (there are 14 crore LPG consumers) since the launch of DBT-L on June 1. For DBT which covered 27 schemes related to pension, scholarship and other social security payments, Aadhaar was made optional, and going by the numbers, it’s a no show. Though the scheme was launched in January 2013 only `500 crore has been disbursed so far. This owes much to the poor Aadhaar and banking coverage.

Though experts agree that the DBT-L is a good initiative and would help the government save thousands of crore in terms of subsidy leakage, Aadhaar has a limited role to play. They further argue that though Aadhaar can help in eliminating ghost beneficiaries from the database, but it does not cover the case of several connections in the same family. According to sources in the oil marketing companies, most of the savings came from the inter-sharing of databases among the oil marketing companies.

The great Aadhaar slide

• Yashwant Sinha-led parliamentary committee on finance objected to the very purpose of Aadhaar programme and said the bill was unacceptable in its present form
• Supreme court in September 2013 passed an interim order, saying Aadhaar could not be mandatory for accessing various services. It also objected to the issuance of the 12-digit number to illegal immigrants
• Early in December, the intelligence bureau (IB) objected that the numbers were issued without checking the veracity of the individual’s address. It said the authorities needed to be more cautious in considering Aadhaar as proof of residence in conflict areas such as Kashmir and the northeast
• One of the software service providers to UIDAI receives fund from In-Q-Tel, the not-for-profit venture capital arm of the CIA, according to a media report

Dr Virmani recalled that several CMDs of the oil marketing companies had told him that they had enough information on their records to separate LPG cylinder delivery from subsidy witout any need of UID, if they were given a clear mandate to do so!

Optional or mandatory
The UIDAI, on its part, has always been proposing that the Aadhaar number is voluntary and it doesn’t ensure any entitlement. The user departments, however, have been making Aadhaar mandatory for service delivery, till the supreme court’s September 24 interim order that categorically said that no one should be denied of any service for want of Aadhaar.

The interim order came on a petition filed by former Karnataka high court judge KS Puttaswamy. The mater is sub judice.Experts believe that the nature of Aadhaar should have been debated in parliament, something which is now being done by the supreme court. For Justice RS Sodhi, Aadhaar is a tool to deliver benefits at people’s door step, but questions like mandatory or optional, all residents and residents minus illegal immigrants, collection of biometrics and privacy safeguards should have been debated in parliament. After four years, the national identification authority of India bill, introduced in 2010 to provide statutory backing to Aadhaar and bring clarity on its several aspects, is unlikely be tabled in this extended winter session.

Responding to the first draft of the bill in 2011, the parliamentary standing committee on finance headed by BJP’s Yashwant Sinha, questioned the very purpose of the Aadhaar programme and raised questions relate to privacy, data protection, enrollment of illegal immigrants, among others.

The privacy concerns
On the ground of privacy, liberty and freedom, European countries including the UK and Germany have abandoned biometrics-based national ID programmes. While there were no public discussions over the project, the government has been indifferent to demands for a stronger privacy law, which ideally should have preceded the Aadhaar programme. As of now there are no safeguards if the resident’s data is compromised or Aadhaar is used for illegal profiling.

“The government is doing surveillance in the name of development,” said professor MSS Pandian who teaches at the centre for historical studies, Jawaharlal Nehru University (JNU). Why should the state have residents’ biometrics, questioned Pandian. “When a third of the country is witnessing insurgency how can the government claim to map every single resident,” he asked.

When & What
January 2009: UIDAI was notified
December 2010: First NIAI bill introduced
December 2011: Yashwant Sinha-led parliametary panel rejected the bill
September 2013: Supreme court’s interim order said Aadhaar can’t be mandatory 
October 2013: Revised bill was approved by cabinet
February 2014: 56 crore Aadhaar numbers generated; expense: `3,500 crore

The Nandan Nilekani vision remains blurred
In his book ‘Imagining India’ (2009), under the sub-head, ‘from subsidies to direct benefits’, Nilekani writes, “Across our creaky subsidy distribution systems, leakages average 50 percent and more. The inefficiency of these state schemes has gotten even worse over the last two decades: in the 1980’s Rajiv Gandhi had earmarked that for every rupee spent on the poor, only 15 paise reaches them; in 2007 his son, Rahul, offered his own estimates, saying that now a mere five percent of every rupee spent reaches the poor in some districts.”

Putting emphasis on the need for a ‘single citizen ID’ and linking it with subsidy and social security payments under several government schemes, he says, “Lack of unique ID has given space to lot of phantoms—in voter lists and in below poverty line schemes and holding back accounts with multiple PANs…. creating a national register of citizens assigning them a unique ID and linking them across a set of national databases like the PAN and passport, can have a far reaching effects in delivering public services better and targeting services more accurately.”

While it is hard to speculate on the future of Aadhaar, people’s concerns about the programme remain. In Seelampur of Delhi, 55-year-old Liaquat Ali, who migrated to the national capital some 25 years back from Lucknow and has a business of wooden furniture, explains how he perceives Aadhaar. “For us the having an Aadhaar card has become a must. But we haven’t benefited. Perhaps the government has… they now have a database of all residents. They now know.”

The future of Aadhaar will be shaped by the final verdict of the supreme court and how politically lucrative Aadhaar seems to the new government.